Did Alaskan Buddies Try to Defraud Taxpayers to Pay Ben Stevens?

March 8, 2007

By Stephen Taufen - Have you read Victor Smith's two-part article on AlaskaReport.com regarding the Southeast Alaska seine fisheries federal buyback program being like a robbery? Didn't he call it a Laundromat? Here's what Paul Harvey might call "the rest of the story." Or, the grease-stained laundry.

Is Performance-Based Lobbying Legal?

Smith's depiction refers to how, back in November of 2004, Bobby Thorstenson Jr. and Rob Zuanich were running the contracts with Ben Stevens' services to lobby Congress on the need for a hybrid fishing vessel reduction program of $50,000,000. Ben was allegedly to receive fees based on a percentage of the take - a contingent-upon-performance fee that might just be an illegal arrangement for a federal lobbyist to Congress to make.

Considering it was to lobby Ben's father, U.S. Senator Ted Stevens, one would think maybe Ben had a compelling reason to ask daddy for the big green car! How does 18 USC sec. 201(b)(1)(A) read?... "corruptly promising an item of value;. with intent to influence their official acts and dealings with the Congress, including pending law."? Let's save that ride for the trained officials.

You will recall from earlier Smith writings, as well, the original idea was for Southeast Alaska Seiners (SEAS) to pay Ben and/or his and Trevor McCabe's Advance North firm, $500,000, or 1%, through some 'convoluted accounting'. When the recently passed MSA Reauthorization legislation went through, Congressmen Don Young and Richard Pombo made sure that this mechanism and program stayed alive in the House Amendments that became part of the Senate bill. Let's leave that journey to the investigators, too.

Only now (Dec. 2006, in the final bill) the buyback program total has dropped to $25,000,000. This pretty well explained why the total payment stream that SEAS contractually agreed to with Advance North LLC shows up in what might be recently re-worked versions of the contracts, unsigned, that were presented to the Alaska Public Office Commission (APOC), with the 'after performance' part totaling over $240,000. That's pretty close to the same percentage cut. Is it legal to lobby Congress based on getting a performance determined reward?

But did you ever know that the State funds that Vic talks about coming from hatchery fish grants or related funds ($144,000 or more), used to pay Ben, were not the only possible source of the "convoluted" payment scheme? A federal earmark of scandalous proportions was attempted.

Koby Mandell Act Provides Cover:

Have you ever read the cozy language of Senate Bill 2809 (108th Congress), as of November 26, 2004? That's after the convoluted plan to pay Ben Stevens was exposed, but before that December meeting suggesting a second contract. It was sponsored by a well-known shill for Ted Stevens, named Senator Judd Gregg (R-NH).

Gregg's no fool, and knew that the seat of power of the fourth branch of the U.S. government was occupied at Ted Stevens' Appropriations chair. He's the equivalent of what Pombo was to Young, a means to float your bill without your name on it as primary sponsor.

The bill was known as 'the Koby Mandell Act, and was for the purposes of making appropriations for the Departments of Commerce, Justice, and State, the Judiciary, and related agencies for the fiscal year ending September 30, 2005, and for other purposes. And therein lies the magic marker ink, as that was Ted's committee, just like this language is Ted's, because some underlord from New Hampshire didn't give a hoot about SE Alaska seine fish (unless he was also on those infamous fishing lodge trips, too).

It was related to bill H.R. 4754, and section 209 is very revealing: as written at that exact point in time. A time when their schemes had gotten revealed in Washington state by Vic in some phone calls and emails, but still in time to have Ted Stevens fix the problem with a new allocation scheme that would land money under Frank Murkowski's administrative and Bobby and Rob's program directive and control powers. This alone should send shivers through Alaska's Legislature.

"SEC. 209. A fishing capacity reduction program for the Southeast Alaska purse seine fishery is authorized to be financed through a capacity reduction loan of $50,000,000 pursuant to sections 1111 and 1112 of title XI of the Merchant Marine Act of 1936 (46 U.S.C. App. 1279f and 1279g) subject to the conditions of this section. In accordance with the Federal Credit Reform Act of 1990, 2 U.S.C. Sec. 661 et seq., $500,000 is made available from the funds appropriated for 'Pacific Coastal Salmon Recovery' in this act for the cost of the loan authorized by this section. The loan shall be to the Southeast Revitalization Association and with a term of 30 years, except that the amount to be repaid in any one year shall not exceed 2 percent of the total value of salmon landed in the fishery and such repayment shall begin with salmon landed after January 1, 2006."

Now doesn't Bobby T. have a seat on the Pacific Salmon Treaty squad that deals or controls Alaska's share of the tens of millions going into the treaty funding package from the USA side? Didn't the two-nation program already have $93 million, and doesn't this make the deliberately loosely worded earmark stand out of Uncle Ted's Magic Appropriations' hat like a rabbit's flappers? Was Ben's contract consideration amount equal to "the cost of the loan" by magic, or were there some friendly little aides at work? Whoops, we forgot to mention that when this entire action was first brought before real live congressmen, it was not for only Southeastern hoodlums, but the request for $50 million was sold as being for "Alaska seine" fleet reduction: statewide, not just the archipelago.

So, what was the intent of Congress? Should we allow the MSA authorized buyback to only be for SE Alaska now? And as you may also ask, should it be SEAS's Southeast Revitalization Association (SRA) in Bobby T and Rob's Calhoun Street Depository that gets to administer this loan? And why is it now for 40 years? Or will the public integrity investigations call a halt to any and all federal dollars going through any greasy hands? If I was a Petersburg seiner, or a tied up boat, I'd count on getting ready for work next salmon season, not the golf course.

Mens Rea, Actus Reus, Lucri Causa:

IT IS HIGHLY IMPORTANT TO READ THE SECTION 209 BOLDING AGAIN! Later on, the bolding was changed to read $200,000, and the section eliminated the PC Salmon language and included "for the cost of guaranteeing the loan" - a clear sign that tipped off Congressmen and NOAA officials also thought this could be a conspiratorial fraud. So, the language did end up changed, just as contracts that are unsigned magically appeared to change, as well. I believe that his temporary language is regarded, in legal terms, as "mens rea, actus reus, lucri causa" - proof of a criminal mind, an accompanying criminal act, and for the sake of gain. Handcuffs please!, for my next stunt...

Add in the fact that the new language also says "40 years" and you have another communication, another set of motives and intents, and more personal assistance in the Congress to keep this program alive no matter how little sense it might currently make. That may indicate the greater need was to keep the payoff mechanism alive.

When I'd found this language in the bill, we immediately shared it with a Washington DC investigative reporter who had just confronted Ted on this bill that week (in mid-Nov. 2004). Admiring our efforts from all the way across the country, he enthusiastically replied "Congratulations, it looks like you found it!" - referring to the means of the conspiracy to defraud the taxpayers and launder PCSR funds through an Alaska state agency, eventually bound to pay off Ben Stevens.

Ben was no longer a registered lobbyist with the Senate or House, and was currently serving in the Alaska Senate, as its president. Is it legal for a state senator, and or his consulting firm, to lobby the Congress? And to do so without registration?

Well, you might also find it interesting to note again that when Ben was under APOC's magnifying glass in the sunshine of Ray Metcalfe's ethics complaints, as the heat turned up in 2005, he sold out his half of Advance North LLC, for next to nothing, to Trevor McCabe, Ted's former fishery aide. Slightly interesting because while SEAS board members were sold on the contract with Ben Stevens, based on his success in crab rationalization lobbying, Ben was not registered in DC, but McCabe was, as of December 4, 2004.

But McCabe's handwriting shows the effective date of the registration was October 15, 2004. Before then, O'Connor & Hannon LLP attorneys held the lobbying contract with SEAS, since 1998. The attorneys included George J. Mannina Jr., Robert Barrie, and others; and the issues they lobbied on also included a "Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act." One must conclude that SEAS' major purpose was to fish for special interest welfare.

It takes money to lobby, and as Vic pointed out they were hardly on enough cash to cover Bobby's salary, and to pay Ben. So, the State of Alaska should dig deeper into this. No one but taxpayers paid, as SEAS members paid dues too, only for lobbying gas to drive them to the federal depository.

Ain't No Buddy, Like My Buddy:

More interestingly, Trevor also lobbied during 2004-2006 for the Bristol Bay Economic Development Corp, Yukon Delta Fisheries Development Assn, Coastal Villages Region Fund, and the Coalition for CCF Reform. Both BBEDC and YDFDA also had insertions in the new MSA amendment, as well as in an earlier Coast Guard legislation (H.R. 889). Surely Ted's former aide, Trevor McCabe, knew the language changes and probably wrote them into HR.889, especially the part about directed loans subsidizing $200 million to a limited number (less than 40%) of Alaska's nearly 230 native corporations, tribes and villages. Here's the highly exclusive (selfish) language:

"Loan Subsidies- The last proviso under the heading 'National Oceanic and Atmospheric Administration--OPERATIONS, RESEARCH, AND FACILITIES' in the Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006 (Public Law 109-108; 119 Stat. 2311-2312) is amended--

"(1) by striking 'for the cost of loans' and inserting 'to subsidize gross obligations for the principal amount of direct loans, not to exceed a total of $200,000,000,'; and

"(2) by striking 'use' and inserting 'the purchase of all or part of ownership interests in fishing or processing vessels, shoreside fish processing facilities, permits, quota, and cooperative rights'."

It seems gravely unfair that Alaska zone harvesters should have from 10.7% to 20% of the TAC (total allowable catch) under many species taken right off the top for Community Development Quotas - like a Boston Tea Party tax! Fishermen and their processors are not the only ones responsible for Native welfare or social safety nets, and that represents a huge chunk of our fleet's profit making capability. The fleets pay taxes to the federal government, the government squeezed taxpayers for the subsidies, Ben and Trevor and buddies collect fees, and then the CDQ groups don't pay taxes; then they compete against others to purchase quotas and boats, using tax-free advantaged funds.

But that is not the most crooked part of it. Those greedy few who play this game in the native community's corporate management headquarters are discriminating against the other 60% of Alaska's native corporations and their members. That should be ruled to be illegal discrimination: see the U.S. Constitution. An equally egregious harm, pointed out to me several years ago by a former ANC president who said the Aleuts would not let the Tlingit and Haida fishermen in on their Western Alaska fisheries (so much for fair play on the state permit level), is that there is no requirement for the CDQ profiteers to give stock in the factory trawlers or fish companies they own to all Alaska natives.

This is one of the reasons why it is so enigmatic that people like Duncan Fields, an attorney who earned a lot of money consulting for Gulf of Alaska and SE Alaska villages that got cut out on that CDQ welfare takings, don't complain about all the other native villages who got left behind. Whoops, we're venturing into another buddy of Bobby's and Ben's here, so let's just leave it at that.

It's a 'Never Ending Story':

It can't be forgotten that Sec. 205 of the same bill read "$10,000,000 shall be provided to the Alaska Fisheries Marketing Board." Dang rabbit ear! That's the AFMB Ben chaired, Trevor co-chaired, Duncan now chairs, and Bobby T served on. Board responsibility didn't include out-voting Stevens when the rest of the members collectively disagreed with him. It's the Uncle Ted effect.

Governor Sarah Palin's fish and game transition team were all in favor of keeping our experienced and skilled negotiators on the Pacific Salmon Treaty squad. Well, maybe they would like to rethink that one?! And be careful who gets a federal fishery council seat, too.

I'd conclude by respectfully saying, "and now you know, the rest of the story!" but we haven't even mentioned the part where the Alaska SeaLife Center in Seward got $50 million from Uncle Ted. And that later on, an investigative reporter wrote extensively about how adjacent property that McCabe had rights in (i.e. he personally profited) found it was purchased by the Center. Of course that was an appropriately short number of years after McCabe was no longer a gold assayer in Ted's offices. But (Trevor's former partner, and Ted's son) Ben's good old childhood chum, Brad Gilman (another former Ted aide) who grew up on the Kenai was then the Center's lobbyist, which you can find out on the website for the Senate Office of Public Records, but only if you misspell it "Alaska Sealfe Center".

But, Ben's former records (Stevens & Assoc) seem to have been stricken from the Senate database, about 10 months ago. But folks are working on that, and there are some printouts floating around from over a year ago. Cover ups aren't easy to pull off in the age of the Internet.

Bureau of Justice statistics show that for federal cases where 'money laundering' charges are included, most (60%) include underlying property transactions, 90% are won; and of those, 90% are by guilty pleas. Now that's "Deliverance." Just how loud can a pork fed group of buddies squeal?

Anticipating all of this will wear you out; so, did you ever hear the one about how a bunch of poor young country bumpkins marched off to old Washington DC, all worked really hard, and lo and behold, they all ended up being rich? It's like the little ditty:

"Ain't no buddy, got no buddy, like my buddy do. He's got the best buddy, in the whole wide world. The best buddy, including you!"

By Stephen Taufen, Groundswell Fisheries Movement